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Michigan State University University Services

Purchasing Process Overview

The purchasing process is utilized when a department is procuring goods from an outside supplier and is governed by the Manual of Business Procedures, local, state, and federal laws and regulations. While each purchase is initiated by a requisition in the Finance System, the course it follows varies depending on cost, complexity, legalities, or unique characteristics of the buy. Early involvement of Purchasing is recommended.

Below are the steps of a typical PO at MSU.

  1. Determine your need for goods, supplies, services, equipment, or services.
  2. Consider sustainability factors before you make a purchase and consider all internal suppliers first, including University Stores warehouse, University Stores Open Orders, and MSU Surplus Store.  
  3. If the item is unavailable from internal sources and meets the criteria for Pcard use, obtain the item(s) using your Pcard. 
  4. If the items or services you require are not available from internal sources or are inappropriate for Pcard use, you may use the Finance System to initiate a requisition for a Purchase Order.
  5. As a part of workflow routing, the Purchasing Department will receive your requisition and it will be assigned to a staff member as a Purchase Order. Though the PO number has already been assigned, the order is not complete until it is in an approved status in the system. Departments are not to retrieve or provide the order number to a supplier while the order is in an unapproved status.
  6. The Purchasing staff is responsible for ensuring university policy and procedure, federal, state and local laws and regulations are met.
  7. The request will be reviewed to determine the best course of action for the purchase based on cost, funding source requirements, and MSU requirements. For complex or high-dollar buys, the individual handling the purchase will contact the end user to discuss the steps required to complete the transaction. Please note that budgetary quotes can be obtained by departments, however competitive bids are to be solicited by Purchasing staff who can provide assistance in reviewing bid responses and making selections.
  8. As a part of the review and negotiation process, Purchasing will ensure that the best-value shipping option is chosen (from an MSU strategic contract) and included in the PO ensuring best rates, service, and compliance with Central Receiving guidelines. 
  9. The supplier ships the item to Central Receiving and sends the invoice to Accounts Payable.
  10. Central Receiving delivers the item to you; you verify the PO number and inspect the order to make sure it is complete, accurate, and in good condition.
  11. Accounts Payable processes the supplier payment based upon the designated payment terms on the order. Payment requests are routed to the fiscal officer for approval. For any invoices that should not be paid, the fiscal officer should place them on hold while investigating. Upon determination that the invoice should be paid, the hold can be removed and the fiscal officer can approve the invoice through for payment.
  12. The Purchasing staff is available to assist following issuance of the order, receipt of the goods or services, or post-payment.